Texas Roadhouse(US:TXRH)2020-02-21 02:18Financial Data and Key Metrics Changes - For Q4 2019, Texas Roadhouse reported revenue growth of 19.7%, driven by 12.9% store week growth and a 6.8% increase in average sales volume [16] - Diluted earnings per share grew by 45.4%, positively impacted by an extra week in the December period, which contributed approximately $0.10 to $0.11 to diluted earnings per share [16][17] - Comparable restaurant sales increased by 4.4%, with a 1.5% traffic growth and a 2.9% increase in average check [17] - Restaurant margin dollars per store week grew by 13.9%, and restaurant margin as a percentage of total sales increased by 117 basis points to 17.1% compared to the prior year [19] Business Line Data and Key Metrics Changes - Bubba's 33 saw comparable sales growth of 7.1% for the full year 2019, with lunch additions contributing 2% to that growth [11] - The company plans to open at least 30 new company restaurants in 2020, including up to seven Bubba's 33 locations [10] Market Data and Key Metrics Changes - The company experienced a 4.7% increase in comparable restaurant sales for the full year 2019, with a 1.8% increase in guest counts [6] - For the first seven weeks of 2020, comparable sales increased approximately 6.4% [17] Company Strategy and Development Direction - The company is focused on maintaining strong sales growth and operational efficiency, with plans to relocate six older company restaurants over the next 12 months [12] - Texas Roadhouse aims to drive shareholder value through share repurchases and dividend increases, having repurchased over 2.6 million shares in 2019 and increased dividends for the seventh consecutive year [13] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued wage rate pressure and moderate commodity inflation in 2020, with plans for a price increase of 0.5% to 1% in Q2 [8][9] - The company expects positive comparable sales growth for 2020 and restaurant store week growth of 3.5% to 4.5% [28] Other Important Information - The company ended 2019 with $108 million in cash, down from $210 million the previous year, while generating $374 million in cash flow from operations [27] - The company’s G&A costs for Q4 increased by $2.3 million to 5.3% as a percentage of revenue, but decreased by 66 basis points compared to the prior year [24] Q&A Session Summary Question: Margin growth in 2020 - Management indicated uncertainty regarding margin growth due to various factors, including pricing and labor costs [34] Question: Labor scheduling efficiencies - Management noted that labor efficiencies vary by store and are being managed individually [38] Question: Pricing philosophy - Management emphasized a conservative approach to pricing, primarily to offset inflation rather than to drive margin expansion [51] Question: Unit economics of Bubba's - Management reported strong comparable sales growth at Bubba's and noted improvements in margins [53] Question: Commodity inflation outlook - Management expects higher inflation in the first half of the year, with benefits in the back half due to locked prices on over 50% of the commodity basket [94]